Online Reviews Can Hurt Contractors and Homeowners - Fine Homebuilding
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Editor's Notepad

Editor's Notepad

Online Reviews Can Hurt Contractors and Homeowners

comments (13) December 12th, 2012 in Blogs
ScottG Scott Gibson, contributing writer

An unhappy customer pans her renovation contractor on Yelp, and the builder responds with a $750,000 defamation lawsuit

The wide reach of the Internet and the ease of posting online opinions are leading to very public disputes between builders and their customers, with reputations and hundreds of thousands of dollars hanging in the balance.

Not long ago, a Fairfax, Virginia, woman furious over her treatment by a Washington, D.C., contractor took her beef public at Yelp, an online site that offers reviews of everyone from physicians to auto mechanics.

She accused the builder of damaging her home, billing her for work that was not performed and even making off with some of her jewelry, according to an article in The Washington Post.

"Bottom line," she wrote, "do not put yourself through this nightmare of a contractor."

And the contractor's response? He sued his onetime customer for $750,000, claiming that reviews at Yelp and Angie's List were defamatory and driving away business.

Not the first disgruntled homeowner
The Post also reported on an earlier case in which a remodeling contractor sued unhappy customers for $6 million after they complained about his performance on Angie's List, another online source of reviews for service providers.

Angry customers who turn to the Internet see it as a First Amendment right, but business owners worry that a single false review can have far reaching effects. The Washington, D.C., contractor, for example, argues that negative comments have cost him $300,000 in lost business.

Angie's List and Yelp have been found immune from defamation lawsuits. "It is important to specify that Angie's List is immune from defamation suits based on the postings of third parties on its interactive Internet site, according to the federal law known as the Communications Decency Act of 1996," one court ruilng says.

But that protection hasn't prevented the disputes between builders and customers from finding their way to court, and no one knows exactly how often that takes place. If the number is apparently small now, The Post says, it's on the increase.

Yelp accused of skewing reviews
Yelp can't be held accountable for posting someone's opinion online, but the company has been accused of wrongdoing of its own. In a 2011 class action suit, Yelp was charged with offering to remove negative reviews in exchange for buying advertisements. The suit was dismissed.

Critics, however, were quick to step forward with claims that Yelp approached them to buy ads and promised to review how the online reviews were being filtered in return. Some posts accused Yelp of removing positive reviews and allowing negative reviews to stand, giving consumers a distorted picture of their business practicies. Some posts claimed Yelp reviewers threatened negative online reviews unless their requests for free or reduced price services were met. Results could be ruinous.

The impact of online opinion forums is of particular interest to entrepreneurs like Michael Fertik, the CEO of a company called Fertik's company helps consumers manage their online reputations, including, according to an article in The New York Times, ways of making negative reviews less visible.

Fertik is part of the growing "consumer data trade," a $2 billion indusry in the U.S. that is mostly unregulated, The Times said.

Thanks to the internet , the distribution of information and opinions--good and bad, accurate and erroneous--is now instantaneous and almost impossible to control once online.


Is the moral of the story "think twice before you click 'submit'"?


posted in: Blogs, business,

Comments (13)

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Posted: 3:30 am on March 5th

CivilEng43 CivilEng43 writes: Once it comes to the point of blasting the contractor or the homeowner on some website, the situation is just plain out of hand. I've made it a point to look ahead and see how to prevent things from going that far.

As a homeowner, I've had my share of experience with good and bad contractors - on both sides of the Atlantic. Before contracting out work, I try to inform myself as much as possible about how the work should be done. Fine Homebuilding's articles and videos have been a big help and of course investigating building code requirements. This helps me to evaluate prospective contractors and in the event of getting a bad one, to know when to fire the contractor before the problem gets really out of hand. Admittedly, being a retired civil engineer with structural experience and an enthusiastic DIYer, I may have an unfair advantage over the average homeowner. All the same, it has been necessary for me to fire contractors - in New York and in Switzerland.

One thing that makes the situation in Europe slightly better is widespread and uniform apprenticeship training. In the U.S. the on-the-job training that most young workers get depends largely on the competence of the contractor doing the training and this is just not uniformly good.

A couple tips for homeowners: Don't employ the contractor who talks the best. Insist on visiting him/her on one or more jobsites and in his/her shop. If you have to employ a contractor whom you do not know, employ him/her to do some work of limited scope. If you are satisfied with that, then maybe give him/her the whole addition to build.

Posted: 9:14 am on December 18th

bwbergstrom bwbergstrom writes: Lawsuits like this are an admission of failure. Nothing can replace bona fide face-to-face contact and resolution. Customers are gold not fool's gold. Respect and anger are not compatible. That's it.
Posted: 8:53 pm on December 17th

renaissancemanllc renaissancemanllc writes: Yes, the construction/renovation business has many shady characters. Contracts, change orders, and COMMUNICATION are all required. My biggest problem is the 'bad' customer. The one we've all had at least once. They sign the contract, they sign the change orders, approve everything and then refuse to pay, or all of a sudden, they don't like anything and want it all done over again. There should be a list just like angies list or yelp to list all these 'bad' customers so that good contractors don't get stuck with them.
Posted: 8:51 pm on December 17th

Martino5150 Martino5150 writes: Too many people have stories of bad contractors. Moral of the story if you take a job do the right thing because home owners are getting pissed and in many cases they have every right.
Posted: 7:16 pm on December 17th

AspenDave AspenDave writes: The moral : As a qualified tradesman always make sure that you and the client are both on the same page about what the client wants and what you are going to produce (In writing).
Always keep the client up to speed and in full, ongoing discussion about the project. Any problems and / or changes can be dealt with immediately.
This way red flags can easily be detected and the situation can be remedied (some clients can be impossible to deal with at this point).Hopefully the "mud slinging" can be prevented.

Be professional and stay away from the "social media" epidemic.
Posted: 5:23 pm on December 17th

eastcliffe eastcliffe writes: This article interested me because I spend a lot of hours as an expert witness in construction defect cases. While the article appears to me to be unbiased and only pointing out a growing trend, I found a number of the comments based upon unknown assumptions. The article doesn't reveal all the facts relating to the construction project, and yet so many are quick to assume the guilt of either the contractor or the homeowner. Regardless of who was wrong in this case, it's a good warning that if you don't treat your client/contractor fairly, there is a potentially more damaging way of getting the word out now.
Posted: 2:10 pm on December 17th

Randyhorse Randyhorse writes: While it is sad to think that dutiful, reliable and conscientious contractors are having their businesses affected by bad reviews, the even sadder truth is ..... THERE ARE A LOT OF VERY BAD CONTRACTORS OUT THERE !!!!

Unfortunately, there are more bad contractors then there are good. Having been ripped off by poor work, work not completed and yes theft of thousands of dollars worth of tools over the years, the only remedy I have been able to come up with is to never leave the contractor alone on the job site. I constantly oversee what they are doing and saddly usually know more about codes, safety and the best and most eeficient way to do things then they do.

The sub-par contractors hate me and usually walk off the job. The ones that are up to the challenge are great to work with, welcome the company and are more than happy to impart their knowledge.

So listen up contractors ..... don't want bad reviews, learn how to do the job before you hang out your shingle !!
Posted: 12:33 pm on December 17th

RM_Colorado RM_Colorado writes: My presumptions would not be to cloud the contractor.

The lawsuit is probably very well founded, because the legal system has inherent penalties for filing actions that cannot be substantiated to a reasonable degree. It is therefore far more likely the contractor can show sincere attempts to please the homeowner before being slandered. Moreover, the contractor can probably establish a high degree of unreasonableness on the homeowner's part.

Given my 35-yrs of experience in this profession, I've seen a fair amount of questionable workmanship, but the general trend has become the outrageous behavior and actions of homeowners.

As safeguards, my contracts contain a "right to cure" clause and a provision for a homeowner's responsibility to inspect work in progress — either accepting or rejecting it, which is largely a subjective opinion. I keep communications open, frequent and in writing in order to make sure the homeowner is fully informed and pleased with the work results.

I do this because a growing number of clients believe they can cheat their contractors by raising false and/or exaggerated issues in order to get a discount on the final invoice. This is to say they can't be pleased no matter what. If I sense red flags flying I won't take the work to begin with, but this doesn't always work because that's the nature of deceit. Sometimes the red flags don't fly until it's too late.

I've often thought of developing a website that does the opposite of a contractors' referral list: one that warns contractors of nefarious homeowners.

p.s. Before anyone jumps in and presumes a lot of troubles on my end, not so fast. I've had very few problems that couldn't be resolved amicably and only one that led into court. I'll close by saying that single court case convinced me there's no such thing as the justice system, although the judgement was 100% on my side.

Good Luck to the Contractor!
Posted: 10:58 am on December 17th

dan155 dan155 writes: I was involved in a defamation of character suit because I made negative comments about a local contractor. The comments I made were true, not even exaggerated. The truth wins in defamation cases. The problem is that it is difficult to prove and very expensive. Even tho I was right it cost me a lot of money. After two years of motions, it was settled out of court. E-mails I sent were used to make their case. I will never put anything in writing again.
Posted: 10:50 am on December 17th

jesse215945 jesse215945 writes: Recently, there have been reviews that were 100% bogus touting companies or products. The writers were paid up to $50. per favorable review and often had never even seen the product or met the contractor. So, it cuts both ways.

I've been in business long enough to know that there are a fairly large number of contractors who do substandard work, knowingly hire unfit subs, and extract the maximum amount of profit from unsuspecting customers. Other than sue, what other otions do the customers have?
Posted: 10:06 am on December 17th

JimRuss75 JimRuss75 writes: Contractors should make every effort possible to make sure that their customers are satisfied. From the article, the customer sounds pretty peeved. Sorry, but that doesn't just come out of the blue. I have a hunch that the contractor knew early on that the client was unhappy. What effort did the contractor engage in to correct the situation? The contractor should have the right to respond to negative reviews.

Business is business. If you want to stay in business, you have to make sure that your work is of professional quality and that your customers are completely satisfied. Yeah, that can be difficult to maintain, and you may even lose money occasionally. So be it. If you don't think that's fair, then go work for someone else. But a 3/4 million dollar lawsuit because an unhappy customer voiced an negative opinion of your work is outrageous.

Posted: 7:04 am on December 17th

renosteinke renosteinke writes: Headlines aside, it's the same old debate - one that was settled even before there was a USA, and new technology doesn't change a thing.

"Free speach" has always been subject to restraint and recourse. You may be called to account if you lie or slander. There's an entire doctrine that defines these matters, and the damages that my be awarded.

It never fails that folks try to re-invent this wheel. Some of it is because a lawyer realizes that he gets paid no matter what, and part of it is a deliberate strategy to imtimidate, using the cost of the legal system as a weapon.

With the arrival of the 'information age,' folks better get used to everything about everyone becomming public knowledge. Soon it will take just a few mouse clicks to reveal every parking ticket, every lawsuit, every accusation, and every opinion you've ever offered. A few clicks, and the world will know what you've done every day of your life.

So, in that regard, the contractor is tilting at windmills. He will not be able to conceal his shoddy behavior. On the flip side, the complainer is also under examination, and if they are unreasonable that will be revealed.
Posted: 11:01 am on December 13th

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